Starting a business with a great idea doesn't necessarily mean success, as some small business thrive and others fail miserably. There is often a very thin line between a company that is failing and the one that is experiencing an annual decline in sales or a temporary cash-flow shortage. Statistics show that over 39% of small businesses fail due to a bad fit, 38% from lack of time and involvement. And very few businesses fail without warning, but in most cases, it shows few signs. You might find your business falling into the above statistic if you're not looking out for those red flags.
Here are the five signs your small business is failing and what you can do about them.
Dwindling Funds - Keep track of your cash flow, it is the key aspects that help drive your business to success, and if there is continuous low cash flow, your business future might be shaky. Increase profits and the likelihood of your business to survive by trying to understand why is your business not making money? Is it the price? Are you targeting the wrong customers? Pinpoint your problem areas, create a business budget by cutting down unnecessary expenses and implement accounting software, and monitor your cash flow.
High Turnover Rates & Constant Extinguishing Problems - Facing difficulties nonstop in business means having a problem, try to extinguish and avoid the issues before they arise by listing out your obstacle, and determine the ways to tackle and resolve each issue. Another preeminent sign is employee turnover, yes every company is going to have employee turnover, and it’s a part of the business. But if you find your employees dropping out frequently, you probably have more to worry about than replacing employees. Boost your employer brand and show employees that you appreciate them by offering competitive pay or benefits, have team-building activities, give recognition, show them a clear career path, and provide a welcoming environment.
Low Sales - Having a year-round slow season means your sales and customer counts are dwindling, this could be a sign that your business is failing. No business wants to see low sales and losing customers. If you find these issues becoming a pattern, you need to make some changes soon. Ask feedback from your current customers, increase advertisements, offer giveaways, and be more active in your community.
Repeating the Same Mistakes - Another alarming sign is following the same constant mistakes repeatedly, this can be a red flag for your business. It could mean you're getting careless or you're losing your passion for business or you are not taking the right course of action. If you want to keep your business running, try to turn the problem around, and find out where mistakes were made, take a step back, think about your business past, future, and come up with a game plan to prevent them from occurring again.
People Aren't Talking About Your Business - Customer reviews and word-of-mouth marketing are the most important aspects for every small business owner and if none of your customers are talking about your business anymore means, you might have a major problem, and it’s a sign that your company is floundering. To overcome this try to understand your potential and current customers a little better, pinpoint why they're not talking about your business. Is it something negative that they heard about your business or did they encountered a bad experience? Consider encouraging people to talk about your business, provide greater customer services, listen to their concerns, and ask customers to review your service/product and use those reviews to improve your business.
These are the few common signs that your business could be failing, if you recognize any of these signs in your business try to come up with solutions as soon as possible by implementing the necessary tactics.